Those close to the printing and imaging industry know the Memjet saga has been a long and winding one. Memjet and its (former) parent, Silverbrook Research, went public in 2007 with a stunning technology story supported by thousands of patents, dramatically fast printing demos and a business model that offered a far less expensive cost per page for speedy color printing.
Since then, Memjet has pursued an “in-brand” components marketing strategy targeting existing and new printer OEMs, depending on these partners to take their own products to market, with Memjet supplying the exclusive underlying core technology. Memjet has gained significant traction in commercial and industrial wide-format and label printing categories, but its partners in the desktop and workgroup office printer space, while an impressive lot, have been limited to companies in Asia and Europe (including Lomond, Lenovo and LG).
In a seemingly major departure from this aforementioned strategy (and picking up the slack in 2013), Memjet announced it is now marketing an office printer product carrying its own brand — starting with a basic print-only model, the C6010 — and is targeting the managed print services (MPS) channel in the United States and Canada. And while at first glance the strategic shift looks significant, a visit with the company and others in the industry indicates Memjet’s shift is more directional. It still relies heavily on strategic partners, but those partners play more of a “backstage” role than the typical OEM partners Memjet has chosen.
Two moves by Memjet in January 2013 signaled the market shift for North America, including a membership in and follow-up webinar with the Managed Print Services Association (MPSA) and an announcement with Parts Now outlining new distribution aimed at MPS-oriented resellers. Recently, The Imaging Channel had a conversation with Memjet executives to find out more about the background behind the move into this market, what it means for Memjet, and also what it means for the overall managed print services business. We also reached out to MPSA President Greg Walters, who co-hosted the Memjet webinar in late January, to get his views on this newest MPS market entrant.
Before dissecting some of the finer points, it is helpful to iterate the facts, which are summarized in the Winter 2013 Memjet Newsletter: “As part of our MPS strategy for Memjet Office, we announced that Parts Now would be the initial distributor for the Memjet-powered C6010 color printers in North America, bringing an ‘open brand’ opportunity to dealers and resellers. Parts Now is also providing dedicated technical support, technical dealer training, warranty desk and administrative dealer support for Memjet-powered printers. Memjet’s MPS channel program offers select resellers rewards, support and services such as authorized ink tank refill, putting new MPS choices and increased profitability at the forefront of Memjet’s revolutionary color printing technology. Parts Now will also sell Memjet consumable ink tanks, print heads, parts, refilled ink tanks and ‘fill your own’ ink systems.”
So just where did the idea for an “open-branded,” MPS-oriented Memjet offering come from, and when? Actually, a three-year-old interview by Lyra Research’s Hard Copy Observer (now part of Photizo Group) with Memjet’s then newly hired CEO Len Lauer, offered a clue, which I highlighted: “Memjet is transitioning from the R&D phase. It has completed the development of its heads, its consumables, its engines. The business units have done a very effective job building partnerships. We are now heading toward commercialization in 2010 in managed services markets, meaning commercial markets where an OEM sells to end customers doing managed print services, and in 2011, in mass markets, meaning the office.”
Memjet’s VP of Brand & Communications Jeff Bean, based in the company’s U.S. headquarters in San Diego, offered a more current viewpoint, expressing a bit of surprise at Lauer’s three-year-old remarks and how they seem so prescient today. “During 2012’s second half, … a look at the MPS market — and the numbers are dramatic — (revealed) growth nearly tripling by 2015, per Photizo estimates. Anything growing that fast that (is that) large deserved our special attention,” Bean said.
When asked whether this move was more on the tactical side or more strategic, Bean said, “We are pivoting to meet some pent-up demand, both from resellers and end users. The resellers (who will contract with Parts Now for Memjet-powered C6010 printers, supplies and service) have up until now been selling a commodity. It is very compelling for them to service their customers in a new way, and end users clearly see a need for color.”
Resellers will benefit from Memjet’s open-branding strategy. “‘Open brand’ means the reseller owns the device (with private branding alongside the ‘Powered by Memjet’ label) and owns the customer relationships that go along with that,” Bean said. “It is a great time for resellers to come on board. We are offering a different technology and also a different relationship. Of course, overall we are not an MPS-only play, but for this market, the MPS in North America opportunity is just too great to sit by and observe. We need to make sure people are able to get the benefits of Memjet. Once the speed is experienced, people don’t want to give it up.”
As far as competition, the recent move by HP into high-speed color with its Officejet Pro X page-wide inkjet MFP is clearly being given attention. Without naming names, Bean said, “We view (the very high-speed, single-pass, ink-based solutions coming out) with a lot of comfort. ‘Imitation is the greatest form of flattery,’ goes the saying, and when people in the business look at factors like numbers of patents and the ability to bring something to market to offer real customer value, we think we look very good.”
Kim Beswick, formerly of HP but currently Memjet’s VP of marketing and one of the company’s longest-tenured employees, offered her perspective on HP’s strategy. “(HP is) in a very different position; they play to everybody. Memjet is offering something to the office dealer/reseller channel that is truly unique.”
Beswick, who’s based out of Memjet’s Home and Office division in Eagle, Idaho, also provided insight on Memjet’s launch into MPS. “The business model we have always been guided by is really focused on lower cost for basic color printing,” she said. “Managed print resellers are really driving print costs and really interested in cost-per-click. (Memjet management) felt that this was a natural fit for our product. We are in the $500-$1,000 price range, which puts you out of the retail/big-box world, but it is still a low cost for a color (device). We are thrilled to be dealing with a channel that actually sells, always (makes) recommendations and (adds) value for customers. (It) represent(s) a nice complement to the value of Memjet — and (the channel) has become our bullhorn for what we think is the next-generation technology.”
Having experienced most of the company’s highs and lows during her seven years with Memjet, Beswick exuded enthusiasm about this move into MPS. “One of the things we have been talking about lately is that the MPS ‘movement’ has been phenomenal at reducing costs, maximizing uptime and the like, but one thing that has been sacrificed has been broad access to color for end users. MPS has been more about color restrictions, limits and the like in the effort to reduce cost. MPS has not, until now, been able to deliver distributed color at lower costs. Managed print, to be successful in the future, (needs to) bring color back.”
Noting that while at first it may seem like a strategic departure from Memjet’s OEM partner-heavy in-brand components marketing strategy, Beswick noted the current move continues to rely on partners — just different ones, in different ways. “It is increasingly interesting, as we go out and talk to potential partners about the role of Memjet,” Beswick said. “Beyond what we have already covered, we are providing ink-refill alternatives too. We have added to our staff in very strategic ways. … Former MPSA president Joe Bargainier (is) now on the team as well as a small cadre of former HP MPS marketing/sales executives. These are people who have been in the industry (and) understand the role of new technology and what that can do to an industry. We are still small and have to focus, so we need — and are pleased to have found — a powerful channel like MPS: one reseller channel that is truly growing. It is exciting.”
What about the limitations of a one-product, single-function offering? “I am not ready to announce anything today,” Beswick said, “but as far as follow-ons, we are invested in a road map, which will grow the product line. We are talking new heads, printer platforms and MFPs. Of course, we will grow product flexibility, but with the C6010, we have a start, and we can focus, followed by expansion in 2013 and 2014.”
Greg Walters, MPSA president and co-host of the webinar “Get to Know Memjet,” was enthusiastic about this newest MPS effort and sees Memjet’s strategy as a great example of turning potential adversity into opportunity.
“Going back to the Lyra Symposium in 2008, I saw my first Memjet demo, (and) we in the industry have all been watching (since). Last year at ITEX, there they were again, with their high-speed, full-page, full-bleed color pages, and with new OEMs,” Walters said. “It was something different, something new, a bit of romanticism, a la the auto industry’s Tucker story.
“The Memjet people were excited and wanted MPSA to take a look. They brought up the fact they are building a channel around MPS providers because they have a narrow product line and don’t have a brand name — potential weak spots they’ve turned into strengths. Another point is their refillable ink, and the channel supported that. It all leads to fast, great color (that’s) cheap, which is a great sell to the channel’s customers.
“They have five great points in a narrow niche. The have found a channel that is already in that mindset. It doesn’t really matter what the brand is; the channel can make money at the click level. With Parts Now, they are building out a channel and have hired some experts going into business with the MPS channel, a channel where they are already brand-neutral. Then there’s the sizzle too. The old-fashioned demo will sell it,” Walters explained. “We finally have something new and exciting around hardware. It has been ‘same old, same old’ for such a long time!”
And as far as that “coming soon” MFP version, Walters is optimistic about the Memjet schedule but added, “One miracle at a time!”
Memjet’s C6010 printer and MPS reseller program have created quite a stir in the MPS channel. It has the still-mighty HP taking it on with a competing page-wide device, seemingly having a one-up advantage due to multifunction capabilities, but the Memjet team seems to have a formula in place to become a major force in the managed print services market.